Capital gains

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 September 2017 Whether cost of construction is to be taken to arrive at capital gains on the sale of flats received by land owner in view of land surrendered under joint development agreement with latest case laws applicable.

Pushpak Lal

Pushpak Lal (Expert)
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27 September 2017 http://www.legalserviceindia.com/article/l305-Capital-Gains-Tax-&-Joint-Development-Agreement.html
https://home.kpmg.com/content/dam/kpmg/pdf/2014/12/N-S-Nagaraj.pdf

Refer this.

Querist : Anonymous

Querist : Anonymous (Querist)

28 September 2017 thanks for reply. but my doubt was not cleared, because i am asking about computation of capital gains on sale of flats received under JDA. The above links are showing computation of capital gains at the time of entering joint development agreement and not about sale of flats received. Whether cost of construction should be taken as cost of acquisition for computation of capital gains on sale of flats or not. if yes, guide me with latest case laws applicable.

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Pushpak Lal

Pushpak Lal (Expert)
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28 September 2017 It seems you havent read the kpmg article properly. It clearly says that there will be two sorts of capital gains
1. when developer gives possession of flats to owners - cost of construction minus cost of acquisition is capital gain
2/ when the portion of flats given to owners are sold, either by himself or by the developer himself- sale value minus cost of construction is capital gain.

Go through it again and in depth.